Africa’s real estate market is very diverse, with each sector presenting different opportunities and challenges. Economic stability, urbanization rates, government policies and housing demand have contributed to rising gross rental yields in the continent’s major cities.

Cities such as Lagos, Nairobi, Johannesburg and Accra are often the focus of investors as they offer significant return potential due to growing populations and increased demand for residential and commercial areas.

The gross rental yield is calculated by dividing the annual rental income of a property by the purchase price and multiplying the result by 100 to obtain the percentage.

This metric represents the potential return on investment (ROI) from rental income, minus expenses such as maintenance, taxes and management fees.

As a result, a landlord with a higher gross rental yield is better off. A higher yield increases the landlord’s return on investment. However, this is not always the case, as some cities simply have very low gross rental yields.

Investing in African real estate presents both obstacles and opportunities. While certain markets have high gross rental rates, investors must contend with issues such as political unrest, legal difficulties and economic volatility.

Of course, a gross yield ratio of between 5% and 8% is considered a good gross yield, while 7% to 8% or more is the best return on property investment one can hope for. With that in mind, here are the five least profitable major cities in Africa to become a landlord in the second half of 2024, according to Numbeo’s updated gross yield index for the half year.

Similar to the first half, 4 of the 5 cities are in the North African region, with the exception of Addis Ababa in Ethiopia. SEE LIST HERE….

It is also important to note that for this list, Numbeo ranks major cities, particularly economic hubs across Africa, rather than the entire continent.